Why You Should Be Careful What You "Like" on Facebook

Looking to sue a corporation? Quick, check your Facebook interests. The New York Times reports today that now your innocent thumbs-up on a brand on Facebook—or the downloading of a coupon—could limit your right to your day in a proper court.

The Times piece highlights just one company who has done this, actually, General Mills:

General Mills, the maker of cereals like Cheerios and Chex as well as brands like Bisquick and Betty Crocker, has quietly added language to its website to alert consumers that they give up their right to sue the company if they download coupons, "join" it in online communities like Facebook, enter a company-sponsored sweepstakes or contest or interact with it in a variety of other ways.

The company instead has inserted a general arbitration clause into its "Legal Terms" which, as General Mills itself glosses on its website:

require all disputes related to the purchase or use of any General Mills product or service to be resolved through binding arbitration.

The experts tell the Times that we might expect others to follow suit:

"Although this is the first case I've seen of a food company moving in this direction, others will follow — why wouldn't you?" said Julia Duncan, director of federal programs and an arbitration expert at the American Association for Justice, a trade group representing plaintiff trial lawyers. "It's essentially trying to protect the company from all accountability, even when it lies, or say, an employee deliberately adds broken glass to a product."

There is indeed reason to suspect that companies will try this sort of thing out en masse. As the Times notes in passing, a recent Supreme Court case called AT&T v. Concepcion opened the door for it. In that case, a California couple who were annoyed they'd been charged $30.22 for a phone that had been advertised as free brought a class action suit against AT&T on behalf of all others similarly (allegedly) scammed. AT&T tried to block the suit by pointing to the arbitration-only clause in the agreement.

The California Supreme Court declared that the arbitration clause, with its explicit waiver of class arbitration was unconscionable, the law's word for "horrifically, unenforceably unfair." Justice Scalia, writing for the majority at the United States Supreme Court, sided with AT&T.

That's a gloss, of course, but what I want to point out is the meta-story on Concepcion: it was aimed at making it harder to bring consumer class actions, which many conservatives believe are a scourge on the great and (in their view) mostly ethical practice of American capitalism. (And to be fair consumer class actions often do result in little benefit for the actual consumer.)

So when your average Cheerios manufacturer goes and puts an arbitration-only clause on their website, it's likely they've done it primarily to avoid class actions. See, for example, Section 3 of the General Mills legal terms:

You and General Mills also agree that any arbitrator that arbitrates a Dispute under this provision is without jurisdiction to conduct a class arbitration or other representative proceeding, and may not consolidate one person's claims with another.

And, as the Times article gets around eventually to saying,

Big food companies are concerned about the growing number of consumers filing class-action lawsuits against them over labeling, ingredients and claims of health threats. Almost every major gathering of industry executives has at least one session on fighting litigation.

Would Concepcion even necessarily apply to General Mills' little maneuver here? It's an open question. The scope of the decision is still developing. And Concepcion involved a relatively straightforward, if totally boilerplate and non-negotiable, contract from AT&T for the purchase of a phone. It isn't clear that a judge would really find clicking on a link to download a crappy 50% coupon an analogous sort of contract. (To my mind it isn't but I'm the next thing to a socialist, so, grain of salt.)

But it's not like that that will prevent big companies like General Mills from arguing that it does, and exhausting the life out of any consumer who tries to challenge them on it. Let freedom ring.